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Public sector lender Indian Bank sustained its all-round performance in the September 2023 quarter with the Chennai-headquartered bank reporting double-digit growth in net interest income, net profit, operating profit, and credit offtake, and a reduction in NPA on year-on-year basis.
The bank’s net profit grew 62 per cent on a year-on-year basis at ₹1,988 crore when compared to ₹1,225 crore in the September 2022 quarter, helped by higher operating profit and lower provisions, on the back of strong rise in net interest income. Net profit in Q2 of this fiscal was up 12 per cent on a quarter-on-quarter basis.
Its operating profit grew 19 per cent at ₹4,303 crore (₹3,629 crore in Q2 of FY23), on the back of a 23 per cent rise in net interest income at ₹5,741 crore (₹4,684 crore).
“Indian Bank’s operating profit, net profit, and net interest income continue to grow quarter after quarter. While asset quality continues to improve, we also maintain higher recoveries than slippages,” said SL Jain, Managing Director & CEO of Indian Bank.
While interest income grew 28 per cent at ₹13,744 crore (₹10710 crore), non-interest income rose by 9 per cent at ₹1,992 crore (₹1,828 crore). Provisions (excluding taxes) were lower by 25 per cent at ₹1,551 crore (₹2,508 crore).
However, fresh slippages were higher at ₹1,976 crore, when compared to ₹1,471 crore in the year-ago quarter and ₹1,753 crore in the preceding quarter. Of the ₹1,976-crore slippages, the agriculture sector accounted for a higher amount at ₹720 crore (₹983 crore), followed by corporate (₹570 crore), MSME (₹451 crore) and retail (₹235 crore).
Total cash recoveries were also lower at ₹1,943 crore, against ₹2,009 crore in Q2 of FY23. Total recoveries (cash and upgradation) were at ₹2,265 crore (₹2,338 crore).
The bank continues to improve its asset quality as its gross NPA dropped to 4.97 per cent in the September 2023 quarter from 7.30 per cent in the year-ago quarter and 5.47 per cent in the June 2023 quarter. Net NPA fell to 0.6 per cent from 1.5 per cent in the year-ago quarter and 0.7 per cent in the preceding quarter.
The bank’s domestic advances rose 11 per cent at ₹45,8681 crore in Q2 of this fiscal (₹411498 crore in Q2FY23). Retail, agriculture, and MSME loans grew by 14 per cent (at ₹95,371 crore), 16 per cent (at ₹110,404 crore), and 5 per cent (at Rs.80,116 crore). These 3 segments accounted for 62.33 per cent of the gross domestic loans. Corporate loans grew by 11 per cent at Rs.172,790 crore.
Domestic deposits grew 7 per cent at ₹619,969 crore (₹577,455 crore). Domestic CASA share slipped marginally to 41.37 per cent from 41.55 per cent in Q2FY23.
The total business of the bank grew by 10 per cent y-o-y and stood at ₹11.33-lakh crore as of September 30, 2023.
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